Informal Employment and Business Cycles in Emerging Economies: The Case of Mexico
This research paper focuses on the correlation between informal employment and business cycles in emerging economies by comparing the case of Mexico with the case of Canada. Thereby it responds to the question whether informal employment is shaping the dynamics of aggregate employment in emerging economies and investigates if it differs from those in developed economies. In the end, results were used to build a business cycle model of a small open economy with formal and informal labour markets, which is then judged in terms of its performance.